Magazine article Drug Topics

How R.Ph.S Can Fight Medicaid Pay Cuts: Make Politics Personal

Magazine article Drug Topics

How R.Ph.S Can Fight Medicaid Pay Cuts: Make Politics Personal

Article excerpt

GOVERNMENT/LAW

As one state after another considers cutting Medicaid reimbursements to pharmacists, if you don't know your state senator, "you're messing up," declared Ernest Boyd of the Ohio Pharmacists Association.

Speaking recently in Washington, D.C., at a conference on legislative and regulatory affairs sponsored by the American Society of Consultant Pharmacists, Boyd lamented that lawmakers do not understand the harm they can do to pharmacies. Medicaid cuts have pharmacists in the crosshairs, and they must defend themselves by contacting legislators personally. "Lobbyists like myself are only as powerful as the people backing us up. If we don't get together legislatively," he warned, "we're toast."

The clamor for lower reimbursements can be blamed on the recession, explained Steven J. Northrop, executive director of the Long-Term Care Pharmacy Alliance. Just two years ago, only one state had a budget problem. Now, with tax revenues down and unemployment and public assistance rolls up, 45 states have budget deficits that could reach $50 billion. To make ends meet, budget cutters generally focus on Medicaid, prisons, and education. No politician wants to be accused of hurting kids or letting criminals go free, so Medicaid, whose constituency has little political influence, usually takes the biggest hit.

Medicaid and its drug reimbursements, moreover, have become increasingly inviting targets. Medicaid accounts for 14.5% of the average state budget, up from 10.5% 11 years ago. The program's growth rate, stable for several years at 5.5%, jumped to 11% in 2001. And there is no sweeping under the rug the 18% annual increases in prescription drug spending between 1997 and 2000.

Lawmakers faced with squeezing pharmacies or drug companies in order to control drug costs find pharmacies by far the preferred choice, thanks to the ease with which savings can be calculated by revising reimbursement formulas. "Average wholesale price minus 10%-20%," has appealing simplicity in a governor's office when a Medicaid director must explain where the savings are going to come from, said Northrop.

The reimbursement issue has been exacerbated by a report last August by the Inspector General of the Department of Health & Human Services that pharmacists were overpaid by more than $1 billion because wholesale drug prices were overestimated. …

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